Downpayment Aid Chopped to $50M

The $388 billion omnibus appropriations bill that Congress is expected to pass next week chops funding for the president's American Dream Downpayment program by 75% to $50 million.Citing budget pressures, House appropriators originally proposed to cut the president's $200 million request for the downpayment assistance program to $85 million. However, Senate appropriators cut it to $50 million, expressing concerns about the viability of the new program, which is supposed to help low-income renters become homeowners. The program "may be helping families with excessive credit risk and who may not be the best candidates for homeownership," says a Senate committee report on the Department of Housing and Urban Development appropriations bill. The Senate appropriators also noted that HUD probably couldn't distribute more than $50 million to the states even if Congress provided more funding for the downpayment assistance program. In the final negotiations, House appropriators went along with the 75% cut.